ITALIAN PENSION SYSTEM

Published January 26, 2013 by Tony

PENSIONS IN ITALY

In Italy, after the last reform, the age of retirement and the calculation methods are changed again. In Italy, the pension now is calculated with reference to the contributions (contribution method) and not on the basis of remuneration (pay method) as it was in the past. This results in lower pensions for those who have higher salaries, with significant savings for the state, of course. In Italy, as in other European countries, also applies the Old Age Security, but has undergone some changes. Currently, for these pensions, is in effect the “quota system”, ie until 2014 if the worker reaches between contributions and age, the portion 97, can retire (61 years + 35 years of contributions).The minimum age for retirement is now 67 years old for whatever worker, except for some privileged categories (workers enrolled in the bottom Flight, personnel of the Armed Forces, Fire Brigade, Police and some work defined as strenuous).
Compared to other countries, despite some benefits, unfortunately in Italy there is no system of flexibility and security in respect of those that do not meet the requirements for entitlement to the pension, like the “flexicurity pensionable ages & longevitypresent in some Northern European countries.

it is interesting to take a look at some charts produced by the OECD (Organisation for Economic Cooperation and Development).

On this chart (click to enlarge) you can see the life expectancy after retirement. In Italy (and France) people live longer after retirement, but the figure is probably distorted by the fact that in Italy, years ago, were in force some “baby pensions”, with people who went into retirement even at 50 years. Norway and the U.S. at the bottom of the list, probably because people decide to continue working after reaching the retirement requirement.

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Pension expenditure on GDPHere, we can see the percentage of “Public and private pensions expenditure” on GDP. Italy is the first place! This does not mean that all Italians have fabulous pensions, indeed, most of the Italian pensions are to a minimum, and the data is distorted by numerous pensions with high amounts paid in respect of certain categories, such as senators, parliamentarians and business leaders. You know how statitiche work, if you earn 100 and I gain 2, the statistics will say that both of us earn 50 on average!

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